Treasury authorizes sale of more Citigroup stock

The government says it will conduct a fourth round of sales of Citigroup common stock, its latest effort to recoup costs from the $700 billion financial bailout.

The Treasury Department said Tuesday it had given Morgan Stanley, its agent for the sales, authorization to sell an additional 1.5 billion shares of Citigroup stock beginning immediately.

Citigroup received $45 billion in taxpayer support in one of the largest bank rescues by the government. The government also provided the bank with insurance against losses on a pool of $301 billion in assets.

Of the $45 billion in taxpayer support provided to Citigroup, $25 billion was converted to a government ownership stake that the Treasury has been selling off since last spring. The bank repaid the other $20 billion in December 2009.

The announcement of the new stock sales came a day after Citigroup announced that it had posted its third straight quarterly profit.

The bank, which is still 12 percent owned by the government, earned $2.15 billion, or 7 cents per share, in the three months ending in September.

Treasury currently owns approximately 3.6 billion shares of Citigroup common stock. With the completion of the new sale announced Tuesday, the government's ownership stake would drop to 7 percent of total shares outstanding. That's down from a high of 27 percent before the stock sales began.

This fourth round of stock sales will end on Dec. 31, even if all of the 1.5 billion shares have not been sold, Treasury said in its announcement.

Treasury exchanged its $25 billion of Citigroup preferred stock for common shares at $3.25 per share. Treasury said taxpayers have so far received $41.6 billion in revenue from the government's $45 billion investment through repayments, dividends and interest and the sale of common stock and other securities it received from the bank.

Citigroup stock closed at $4.17 in trading Monday and has ranged from a low of $3.11 to a high of $5.07 over the past 52 weeks.